Being an Investor in a Trader's Market Carl Mathison Jul 01, 2009 2:25 pm |
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On May 13, I posted the chart below cautioning I'd reached the upper end of the channel and the 200-day market value adjustment (MVA) loomed just above around 952. I cautioned readers to be ready for some profit-taking around that level.
Click to enlarge.
As the chart below illustrates, Mr. Market obliged, pulling back to the lower end of the channel around 878 on the S&P. It then held the 875 level through the rest of May in an 880-920 trading range -- with some very high volatility -- before running through 940 and establishing the recent high at 956.
Click to enlarge.
Notice how the index spent the first 2 weeks of June attempting to close above the 950 level -- without success. Also note how 950 has become substantial upside resistance. At this point, the 20-day MVA is also providing short-term resistance.
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